Exports of Iranian SMEs Rise to €1.3b

EghtesadOnline: Iranian small- and medium-sized enterprises exported €1.3 billion worth of non-oil commodities during the first five months of the current Iranian year (March 21-Aug. 22).

News ID: ۷۴۸۴۱۹

14 September 2019

According to Asghar Masaheb, the deputy head of Iran Small Industries and Industrial Parks Organization, the volume of exports increased by 40% compared with last year’s corresponding period.

“Exports during the five months were made by 1,100 SMEs in different industrial fields,” he said.

Iran is home to over 77,000 SMEs, 43,000 of which have been authorized to operate in industrial parks, according to Financial Tribune.

Masaheb told IRNA that 34,000 of these 43,000 units are currently active and SMEs account for just over 10% of Iran's total exports.

By definition, enterprises run by fewer than 50 workers and 100 workers are considered small- and medium-sized enterprises respectively, according to ISIPO.

Small- and medium-sized enterprises constitute 92% of Iran’s 85,000 manufacturing enterprises.

SMEs' share in Japan’s exports is at 60%, Taiwan’s at 70% and Singapore’s at 90%.

It was reported last year that a total of 35 small- and medium-sized manufacturing enterprises were under development in Iran through foreign investment, adding that 28 of those projects were located in industrial townships with foreign parties investing $2.8 billion.

Plan to Join Enterprise Europe Network

Esfandiar Omidbakhsh of Iran Chamber of Commerce, Industries, Mines and Agriculture announced last year that plans are underway to create an Iranian consortium to join the Enterprise Europe Network for connecting Iranian SMEs with their counterparts in Europe and promoting their international profile.

Launched by the European Commission in 2008, the Enterprise Europe Network helps businesses innovate and grow on an international scale. It is the world’s largest support network for SMEs with international ambitions.

As the network’s official website Een.ec.europa.eu says, the network is active in more than 60 countries. It brings together 3,000 experts from more than 600 member organizations, all renowned for their excellence in business support.

The Research Department of Tehran University, Trade Promotion Organization of Iran and the Science and Technology Department of the Presidential Office have currently been nominated as members of the consortium.

As Omidbakhsh explained during a meeting with the representatives of the aforementioned organizations, the aim of this consortium, which will be formed in collaboration with both public and private sectors, is to promote SMEs’ international activities and expand their capacities.

“The Enterprise Europe Network focuses on three main areas, namely trade, technology transfer and research collaboration,” he said, explaining that the first step to join the network is to form a consortium that should have three to four members.

The ICCIMA official emphasized that members should be selected as per the network’s priority areas.

“To finalize Iran’s membership in the network, two memorandums of understanding should be signed: one between Enterprise Europe Network and the consortium and one among the consortium’s members,” he added.

Omidbakhsh noted that organizations in non-EU countries can apply on a self-financing basis and Enterprise Europe Network does not provide financing to non-EU members, but they can enjoy the various services offered, including accessing the database, receiving help on implementing research projects and getting to know non-EU SMEs.

Iran signed an MoU with South Korea’s Deputy Minister of SMEs and Startups Choi Su-gyu on August 31 to increase bilateral cooperation on the development of small- and medium-sized enterprises.

The MoU was signed during the visit of former deputy industries minister, Sadeq Najafi, to Seoul to attend the Seventh Korea-Iran Technology Exchange Conference.

Inadequate Budget to Support SMEs

Latest data show Iran's small- and medium-sized enterprises witnessed a 28% year-on-year increase in the value of investment guarantees issued in the fiscal 2017-18, according to SME's Investment Guarantee Fund.

The value of guarantees issued reached 1.64 trillion rials ($14 million) for 353 SMEs, compared with the previous year's 1.28 trillion rials ($11 million).

The number of total guarantees, however, dropped 18% YOY to 189.

Khorasan Razavi Province topped the charts in terms of both number and value of guarantees issued, with 22 worth 208 billion rials ($1.8 million), indicating a 13% and 271% growth YOY, ISNA reported.

The fund’s budget of 1,100 billion rials ($9.54 million) is not sufficient to support the country’s tens of thousands of small enterprises, therefore export-oriented ones take priority in receiving letters of guarantee.